IR Notes

After five years of difficult negotiations with several governments, legislators reached agreement on revising Directive 2013/34/EU on “disclosure of income tax information by certain undertakings and branches” thereby forcing multinational companies to disclose how much tax they pay in each country. The proposal for a directive has yet to be approved by the European Parliament’s competent committees, and subsequently by a plenary session of Parliament, and by the Council. The vote in plenary is expected after the summer recess. Member States will then have to adopt the directive into their domestic law. This proposal puts forward rules forcing multinationals (and their subsidiaries) with annual revenues of over 750 million euros, and which are active in more than one country, to publish and make accessible the amount of tax they pay in each Member State. This information will have to be made available on the internet, using a common template, and in a machine-readable format. To facilitate the use of the information provided and to increase transparency, the data provided must include the nature of the company’s activities, the amount of profit or loss before income tax, the amount of accumulated and paid income tax and accumulated earnings. Among the items of information to be disclosed, two will be of particular interest to social partners: firstly, the name of the ultimate parent company and, if applicable, a list of all subsidiaries owned by the company, a brief description of the nature of their activities and their geographical location, and secondly, the number of full-time equivalent employees of the company. All of this information should facilitate the steps that employee representatives who work for these multinationals are required to take when they wish to set up a European Works Council. Certain groups are somewhat opaque when it comes to disclosing the numbers of their employees in the EU, and the distribution of their workforce by country. Consequently, this historic step forward in the field of corporate taxation might have a knock-on effect on collective representation of employees within the EU.
> Find out more: article by Evelyn Regner MEP (S&D) published by Social Europe.

Just Transition Fund now definitively adopted : On 18 May, by an overwhelming majority, MEPs adopted the regulation establishing the Just Transition Fund. This fund is intended to finance assistance for jobseekers and workers who are upskilling and reskilling, as well as the inclusion of workers and jobseekers in the European economy’s transition towards a climate-neutral economy. To discharge its missions, the fund will receive 17.5 billion euros (instead of the 40 billion originally earmarked), to fund the “territorial just transition plans” prepared by Member States that have committed to achieving climate neutrality by 2050. States should prepare these territorial just transition plans, “in social dialogue and cooperation with the relevant stakeholders”.  The IndustriAll Europe trade union federation regards the establishment of this fund as “a milestone for workers and unions in their fight for accompanying measures in the transition of workers” (see press release). Once the Council has formally approved the regulation, it will enter into force on the twentieth day following its publication in the OJEU (see European Parliament press release).

Rail industry: On 18 May, the social partners in the railway sector (ETF and CER) resumed negotiations at EU level for a binding agreement aimed at promoting women’s employment in the sector. The negotiations, which began in 2019, were put on hold during the Covid-19 crisis, but the social partners now plan to reach an agreement before the summer, 15 years after the last binding agreement was signed (see ETF, IT and CER press releases).

• Textiles-Clothing-Leather-Footwear: On 25 May, European social partners in the Textiles-Clothing-Leather-Footwear sector issued a joint statement entitled “The future industrial strategy of the EU Textiles Ecosystem (TCLF sectors)” (see IndustriAll Europe press release). 


• Maritime Technology: On 25 May, European social partners in the maritime technology sector issued a joint statement entitled “Dedicated European policy actions urgently needed to support the survival, resilience and competitiveness of the Maritime Technology sector in Europe” (see joint press release issued by IndustriAll Europe and SEA Europe). 


• Woodworking industries: On 17 May, European social partners in the woodworking industries sector issued a joint position paper on “Building together a greener future” confirming their desire to be involved in the “Renovation Wave” associated with greenhouse-gas reduction targets.

Law on modernising works councils : On 28 May, Parliament definitively adopted the law on modernising works councils (Betriebsrätemodernisierungsgesetz) (see decision). The law, which is due to be published shortly, simplifies the voting procedure used to elect works council representatives; boosts the job security enjoyed by employees who are involved in setting up a works council; reduces the age of eligibility for voting in elections from 18 to 16, and grants permanent approval for the use of virtual works council meetings and of electronic signatures for company agreements, an innovation that the parties involved experimented with during the Covid-19 crisis. The law also strengthens the powers of the works council, which now enjoys a co-decision-making right in respect of the introduction of teleworking, and broader powers regarding the use of artificial intelligence, notably in cases where it is used for employee selection purposes. The right of recourse to an expert is provided for if the works council is required to evaluate the introduction or use of AI when carrying out its duties. Parliament has also extended the protection granted against workplace accidents to all of the employee’s movements within their home (it no longer simply covers “work-related” movements between the office and the printer, for example) and to journeys made by employees in order to look after their children.

Virtual access for trade unions to employees : On 22 April, the German chemical industry trade-union federation and the rubber sector employers’ organisation signed a collective agreement governing the trade union’s digital rights of access to employees in companies by using electronic communication tools. This is the first agreement of its kind in Germany. The Covid-19 pandemic has made it difficult for trade unions to maintain contact with employees. The law allows the IG-BCE union to send e-mails to employees; to use videoconferencing tools for trade-union meetings; and trade-union communications to be made available on the company’s intranet (see press releases issued by IG-BCE and IndustriAll Europe).

New figures published, measuring trade-union representativeness : On 26 May, the Ministry of Employment published the results obtained by trade unions in workplace-level elections, which are used to determine which trade unions will represent workers at industry level and national level. To be deemed representative at both national and cross-industry level, a trade union must secure at least 8% of the total number of votes cast. Five trade-union confederations exceeded the 8% threshold this time, with a few variations compared to the 2017 results. The CFDT remains in the lead with 27.77% of the votes cast, followed by the CGT (22.96%), FO (15.24%), the CFE-CGC (11.92%) and the CFTC (9.50%). Results broken down by industry will gradually be published from September 2021 onwards (see press release).

• Developing mentoring: Within the framework of the “1 jeune, 1 solution” [‘1 young person, 1 solution’] plan, the government has set up the “1 jeune, 1 mentor” service to speed up the development of mentoring, by providing support to 100,000 young people by the end of 2021, rising to 200,000 in 2022. For either short or extended periods of time, the mentoring scheme connects young people aged between 13 and 25 with people who have experience and have volunteered to act as mentors (employees, people who are retired, students, etc.). The mentors interact with their mentees on a regular basis, to give them advice, share their experience or place their knowledge and their networks at the mentees’ disposal, to help them build a career plan.
  


• Experimenting with collective transitions: The Ministry of Employment has signed the first agreements linked to the “collective transitions” scheme provided for in the recovery plan. This new scheme, which has been developed in conjunction with the social partners, enables employers to anticipate economic changes taking place in their sector, and provides employees with support for a planned redeployment to other industries. It encourages job mobility and cross-sector redeployment into emerging industries and short-staffed vocational specialisations in sectors that are struggling to recruit. Following a training course leading to a qualification certificate recognised by a particular sector, the beneficiaries can move into their chosen growth industry before being recruited by a company. While undergoing this training, those taking part in the scheme are not classified as unemployed, and their wage or salary will continue to be paid. Depending on the size of the company, the State will pay some or all of the cost of employees’ redeployment training (including social security contributions – both the statutory contributions and those payable under a collective agreement), training costs for courses lasting up to 24 months, plus a substantial proportion of the wages and salaries concerned. The Korian and Derichebourg groups were the first to sign an agreement covering employees who wish to follow a training course leading to the care assistant’s diploma. On 19 May, Korian and the supermarket chain Monoprix launched a new scheme for 60 employees who are currently working as check-out operators or display merchandisers, but will now continue to be paid while training to become care assistants. After obtaining their State diploma, these volunteer employees can apply to Korian to be recruited on an open-ended contract (see Ministry of Employment press release and Korian press pack).


• Setting a quota for women: On 12 May, the National Assembly [lower house] of the French Parliament unanimously voted in favour of a bill to establish “genuine economic and professional equality” between women and men. This law, which will now be scrutinised by the Senate [upper house], requires companies employing more than 1,000 people to reach a target of having women make up at least 30% of their “managerial staff and membership of their management bodies” by 2027, and 40% by 2030.

Covid-19 and teleworking : On 10 April, following a year of negotiations, the Italian insurance group Generali signed a Joint Declaration on the Emergency Crisis with its European Works Council. The text aims to set out a number of “general principles” for all European establishments to follow, “so as to inspire them to autonomously develop initiatives, respecting the particularities of each country, intended to tackle crisis situations such as the COVID-19 one and to start a gradual transition towards normality”. EWC secretary Carole Bourner explains: “this text is vital for us employee representatives, as it provides not only guarantees in the event of an emergency, but also establishes the basis for our future negotiations regarding the ‘new normality’ of what constitutes work”. The declaration recognises that the switch to teleworking and digitalisation favours a better reconciliation of life and work times, and at the same time, the growth of productivity and the achievement of company results. The text contains provisions covering health and safety, training, work-life balance and aspects of diversity and inclusion, with reference to the previous joint declaration issued in 2019. One of the main clauses relates to teleworking: it establishes a right for employees to switch off after their working day and encourages management at local level to deal with any adverse effects suffered by employees as a result of isolation and the psychological impacts of remote working. The text states that the select committee will be periodically informed about the implementation and the evolution of remote working in countries that fall within the EWC’s scope.

A EWC operating at company subsidiary level : This Wednesday 2 June, the management of Hutchinson, a subsidiary of the energy group Total, which manufactures and markets products derived from rubber processing, held the first meeting of its European economic and social information and exchange group. The creation of this body representing the subsidiary’s European employees, which was not a statutory requirement, was agreed at the time of the negotiations surrounding the SE [société européenne] works council set up by Total under an agreement dated 15 April 2020. This Hutchinson-specific information and social dialogue body “is supplementary to and distinct from the Total EWC and from the national bodies already established within the Hutchinson group in Europe.” Accordingly, Hutchinson group representatives on the Total group’s SE works council will continue to be members of the latter. The new body, which comprises 15 members (including 4 for France, 3 for Poland and 2 for Germany), is competent to deal with transnational matters that concern either the group as a whole in respect of its EU dimension, or at least two group companies or sites located in different Member States. One of the novel features of the agreement is that competence extends to “matters which, regardless of the number of Member States involved, form part of a significant strategic change” decided on by central management, “bearing in mind the scale of its impact on the European workforce, over and above the single country concerned”. Moreover, some “local subjects” may be discussed, “provided that the matter in question is likely to influence Hutchinson’s European position regarding the matter concerned”.

Risks linked to using AI : In a Foresight Brief published by the European Trade Union Institute (ETUI) entitled “Algorithmic management and collective bargaining”, Valerio De Stefano and Simon Taes issue a collective warning to us regarding the urgent need to become aware of the risks – on a scale that we cannot even imagine – linked to using algorithmic management of work tasks, and more broadly, using artificial intelligence. This study, which is rich in examples of using AI in the workplace, shows how “the introduction of AI and of algorithmic management in the workplace is enabling a pervasive surveillance of workers’ activities and performance and triggering grave risks of unfettered exploitation, discrimination and OSH hazards, to an extent that even most employers would currently find hard to envision”. Despite these huge risks, the role played by trade unions is being seriously neglected. We at IR Notes had already warned that there was no mention of social partners in the proposal for a regulation on AI (see IR Notes no. 163). However, the authors, who draw on Article 88 of the EU General Data Protection Regulation, point out that: “Crucially, collective agreements can mitigate the risks of AI-enabled surveillance and decision-making based on algorithms. They can ensure the interests of workers are represented and emphasise the need for essential safeguards to protect fundamental labour rights”. In view of the urgent need to become a stakeholder, the authors invite employees, and more specifically the trade unions in Europe, to reflect on a number of questions, such as: “Do you know if and to what extent algorithmic management is being introduced in your country?” “Are you aware of the risks associated with these developments?” “How can collective agreements better provide adequate safeguards in the context of algorithmic management?” “What role can trade unions play in the regulation of algorithmic management?”.